Plan 2 vs Plan 5 student loans: what you repay, interest and write-off
If you started an undergraduate course in England from September 2012 onwards, your student loan is on Plan 2 or Plan 5, and the two work differently. Plan 5 starts taking repayments at a lower salary and is written off 10 years later, while Plan 2 can charge more interest. This page compares them side by side using the rules on GOV.UK for the 2026-27 tax year (6 April 2026 to 5 April 2027). It is general guidance only, not financial advice.
The short version
| Plan 2 | Plan 5 | |
|---|---|---|
| Who (England) | Undergraduate or PGCE course started 1 September 2012 to 31 July 2023 | Undergraduate or PGCE course started on or after 1 August 2023 |
| Repayment threshold 2026-27 | £29,385 a year (£2,448 a month, £565 a week) | £25,000 a year (£2,083 a month, £480 a week) |
| Repayment rate | 9% of income over the threshold | 9% of income over the threshold |
| Interest | RPI plus up to 3%, depending on income (currently 4.1% to 6%, capped at 6%) | Normally RPI only (currently 4.1%) |
| Written off | 30 years after the April you were first due to repay | 40 years after the April you were first due to repay |
Which plan are you on?
You can't choose your repayment plan. It depends on where you applied for student finance, when your course started and what type of course it was. For Student Finance England:
- Plan 2 if you started an undergraduate course or a PGCE between 1 September 2012 and 31 July 2023 (also Advanced Learner Loans and Higher Education Short Course Loans taken out in that period).
- Plan 5 if you started an undergraduate course or a PGCE on or after 1 August 2023 (also Advanced Learner Loans and Lifelong Learning Entitlement finance from that date). A Higher Education Short Course Loan from that date is still Plan 2.
- Master's and doctoral loans are on the separate Postgraduate Loan plan, and courses started before 1 September 2012 are Plan 1.
Student Finance Wales undergraduate and PGCE loans from 1 September 2012 are Plan 2 (GOV.UK lists no Plan 5 for Wales). Scottish (SAAS) loans are Plan 4 and Northern Ireland loans are Plan 1.
If you have more than one loan you could be on more than one plan. To be sure, sign in to your online student loan account and download your "active plan type letter", then check your employer has you on the same plan.
How much you repay
On both plans you repay 9% of your income over the threshold. Income means what you earn before tax and other deductions, including bonuses and overtime. The amount you owe makes no difference to what you repay each year. If you also have a Postgraduate Loan you repay another 6% of your income over £21,000 on top.
Employees repay through payroll: each payday your employer compares that month's or week's pay with the monthly or weekly threshold, so a bonus month can trigger a repayment even if your yearly pay is under the threshold (you can ask for a refund after the tax year ends). If you're self-employed, HMRC works out your repayment from your Self Assessment tax return. Repayments stop automatically if you stop working or your income drops below the threshold.
The earliest you start repaying is the April after you leave your course. GOV.UK says the thresholds change on 6 April every year.
Worked example: Plan 2 vs Plan 5 in 2026-27
Here's what each plan takes at a few salaries, worked out as 9% of the salary over the threshold (the same formula as our calculator):
| Salary | Plan 2 a year | Plan 2 a month | Plan 5 a year | Plan 5 a month | Plan 5 repays more by (a year) |
|---|---|---|---|---|---|
| £25,000 | £0.00 | £0.00 | £0.00 | £0.00 | £0.00 |
| £28,000 | £0.00 | £0.00 | £270.00 | £22.50 | £270.00 |
| £30,000 | £55.35 | £4.61 | £450.00 | £37.50 | £394.65 |
| £35,000 | £505.35 | £42.11 | £900.00 | £75.00 | £394.65 |
| £40,000 | £955.35 | £79.61 | £1,350.00 | £112.50 | £394.65 |
| £50,000 | £1,855.35 | £154.61 | £2,250.00 | £187.50 | £394.65 |
| £60,000 | £2,755.35 | £229.61 | £3,150.00 | £262.50 | £394.65 |
For example, on £30,000 Plan 2 takes 9% of the £615 over £29,385, which is £55.35 a year. Plan 5 takes 9% of the £5,000 over £25,000, which is £450.00 a year. On £40,000 it's £955.35 on Plan 2 and £1,350.00 on Plan 5.
Once you earn more than £29,385 the gap stays the same at £394.65 a year, because Plan 5 always takes 9% of the extra £4,385 between the two thresholds. Monthly figures here are the yearly amount divided by 12; payroll rounds each deduction down to the pound, so payslips can be a pound or so lower.
This only compares yearly repayments. It doesn't model your balance, interest or how much would be written off, which depend on what you borrowed and how your pay changes over the years.
Interest: Plan 2 vs Plan 5
Interest is added to the amount you owe each month from the day your first payment is made to you or your university, even if you're not working or earn under the threshold. Rates are usually set on 1 September each year using the Retail Price Index (RPI) from the previous March.
- Plan 5: interest is normally just RPI. GOV.UK currently lists it as 4.1%. A temporary cap can apply if comparable market rates fall below it.
- Plan 2, while you're studying: usually RPI plus 3%, currently capped at 6%.
- Plan 2, after you leave your course: a variable rate based on your income. On £29,385 or less you're charged RPI only (currently 4.1%). Between £29,386 and £52,884 it rises from 4.1% by up to 1.9 percentage points, and on £52,885 or more you're charged 6%. GOV.UK's examples: about 4.82% on £35,000 and 5.46% on £40,000, with the 6% cap applying from 1 September 2026 to 31 August 2027.
Interest doesn't change your monthly repayment. It changes how much you owe, and so how long you might repay for and how much could be written off at the end.
Write-off: 30 years vs 40 years
Any balance left is written off at the end of the loan term:
- Plan 2: 30 years after the April you were first due to repay.
- Plan 5: 40 years after the April you were first due to repay.
So with a Plan 5 loan you could be repaying for up to 10 years longer, and from a lower salary, than someone on Plan 2. Loans are also cancelled if the borrower dies, and the Student Loans Company may cancel a loan if you can no longer work because of illness or disability and get certain disability benefits.
Should you make extra repayments?
You can make extra repayments at any time with no penalty, but GOV.UK points out you might not benefit, because the loan is written off at the end of its term, and you can't get extra repayments refunded. Check when your loan would be written off first, and speak to a financial adviser if you're not sure. Student loans don't appear on your credit report, though mortgage lenders may look at the repayments when they check affordability.
Work out your own repayment
Enter your salary, tick Plan 2, Plan 5 (or both, plus a Postgraduate Loan) and see what you repay each year, month and week, including what payroll would take each payday.
Use the student loan repayment calculatorWant the whole payslip? The take-home pay calculator adds Income Tax, National Insurance and pension, and salary after tax has breakdowns for common salaries such as £30,000 and £40,000, each with every student loan plan. To plan what's left each month, try the free bills monthly cost calculator or the Household Bills & Budget Planner (£7).
Frequently asked questions
What's the difference between a Plan 2 and a Plan 5 student loan?
Both take 9% of your income over a threshold. In 2026-27 the Plan 2 threshold is £29,385 a year and the Plan 5 threshold is £25,000. Plan 2 interest is RPI plus up to 3% depending on your income (currently 4.1% to 6%, with a 6% cap), while Plan 5 interest is normally RPI only (currently 4.1%). Plan 2 loans are written off 30 years after the April you were first due to repay, and Plan 5 loans after 40 years.
Which plan am I on, Plan 2 or Plan 5?
If you applied to Student Finance England for an undergraduate course or a PGCE, you're on Plan 2 if you started between 1 September 2012 and 31 July 2023, and on Plan 5 if you started on or after 1 August 2023. Student Finance Wales undergraduate loans from 1 September 2012 are Plan 2. You can't choose your plan, and you can check it in your online student loan account.
How much more do I repay on Plan 5 than on Plan 2?
On the same income, if you earn over £29,385 you repay £394.65 a year more on Plan 5, because 9% is taken on the extra £4,385 between the two thresholds. Between £25,000 and £29,385 you repay on Plan 5 but nothing on Plan 2. Under £25,000 you repay nothing on either.
When is a Plan 2 or Plan 5 loan written off?
GOV.UK says Plan 2 loans are written off 30 years after the April you were first due to repay, and Plan 5 loans 40 years after the April you were first due to repay. The earliest you start repaying is the April after you leave your course.
Does the amount I owe change my monthly repayment?
No. GOV.UK says the amount you owe, including interest, has no impact on how much you repay each year. Your repayment depends only on your income and your plan. Interest affects how long the loan lasts and how much is left to be written off.
Sources
All figures and rules on this page were checked on GOV.UK on 17 October 2026:
Which repayment plan you're on (GOV.UK)
How much you repay, including current interest rates (GOV.UK)
When you start repaying (GOV.UK)
When your student loan gets written off or cancelled (GOV.UK)
Make extra repayments (GOV.UK)
Rates and thresholds for employers 2026 to 2027 (GOV.UK)
How interest is calculated: Plan 2 (GOV.UK)
How interest is calculated: Plan 5 (GOV.UK)
Checked 17 October 2026. Interest rates can change during the year, so check GOV.UK or your online account for your own rate. General guidance only, not financial advice.